Application and Agreement for Standby Letter of Credit

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Application and Agreement for Standby Letter of Credit

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Application and Agreement for Standby Letter of Credit

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  1. FOR BANK USE ONLY Application and Agreement for L/C No.: Standby Letter of Credit CLS Authorized: TO: XXXX BANK                Please issue an irrevocable Standby Letter of Credit as set forth below and forward same to your correspondent for delivery to the beneficiary by: Full Cable Courier Registered/Certified Mail ADVISING BANK (If blank, Bank will select advising bank) APPLICANT (Complete name and address)             BENEFICIARY (Complete name and street address) EXPIRY DATE: Drafts to be drawn and presented to the       negotiating/paying bank on or before (Spell out the month):       Amount:       Partial Drawings are: (If silent, partial drawings are allowed) Currency Name:       Allowed Not Allowed Available by drafts at sight drawn, at your option, on you or your correspondent when accompanied by the following  documents:      1.  The original standby letter of credit (at the Bank’s option)      2.  Letter of Credit language:  in the form shown below or   as attached (Attachment must contain Applicant’s authorized signature on each page).        Instructions to XXXX Bank:       THIS STANDBY LETTER OF CREDIT IS TO BE SUBJECT TO AND GOVERNED BY: International Standby Practices 98 (ISP98), International Chamber of Commerce Publication No. 590, OR Applicant’s Initials: ____________ page 1 of 7 XXXX Bank Application & Agreement for Standby Letter of Credit
  2. Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication  No. 500 (1993 Revision).  ABSENT A  SELECTION, THIS LETTER OF CREDIT  WILL BE  SUBJECT TO  ISP98. Applicant’s Initials: ____________ page 2 of 7 XXXX Bank Application & Agreement for Standby Letter of Credit
  3. APPLICATION AND AGREEMENT FOR STANDBY LETTER OF CREDIT To: XXXX Bank In consideration of your opening at our request a standby letter of credit in accordance with the terms stated on Page 1 hereof (the “Letter of Credit”), and you or your correspondents accepting or paying, at our request or for our account, drafts drawn and other drawings under the Letter of Credit, we, and each of us, hereby represent, warrant and agree, as follows: .1 We, and each of us, jointly and severally, promise to pay you, upon demand, at the office designated on page 1 hereof, in immediately available funds, the amount of each draw on the Letter of Credit, together with interest thereon, such interest to accrue on the amount of each draw from the date paid to but not including the date of repayment at a per annum rate equal to the Prime Rate (as defined below) plus five percent (5.0%) or such other percentage as may be mutually agreed by you and us in writing. The term “Prime Rate” means the fluctuating per annum rate quoted, published or announced from time to time by you as your “Prime Rate,” which rate is a reference point for pricing loans and as to which loans may be made by you at, below or above such Prime Rate. Interest shall be adjusted concurrent with any change in the Prime Rate. Interest shall be computed on the basis of a 360 day year and the actual number of days elapsed. We, and each of us, jointly and severally, authorize you to charge any accounts which any of us may have with you and to make advances against any lines of credit extended by you to any of us for all such payments to be made by us to you hereunder. We acknowledge that you are not obligated to charge such accounts for such purpose and your failure to do so shall not relieve us of liability for such payments. In addition, we, and each of us, jointly and severally, agree to pay you upon demand all commissions, charges, fees, costs and expenses assessed or incurred by you or your correspondents in connection with the Letter of Credit, including, without limitation, such origination fees, draw fees, standby or commitment fees, and similar fees that you charge. We understand that you will disclose the specific amount of these fees upon request. .2 Our obligation to reimburse you for drawings under the Letter of Credit shall be absolute, irrevocable, and unconditional under any and all circumstances whatsoever and irrespective of any set-off, counterclaim or defense to payment which we may have or have had against you or any other person, including, without limitation, by reason of any set-off, counterclaim or defense based upon or arising out of: ()a any lack of validity or enforceability of this Agreement; or ()b any amendment or waiver of or consent to departure from the terms of the Letter of Credit; or ()c the existence of any claim, set-off, defense or other right which we or any other person may have at any time against any beneficiary or any transferee of the Letter of Credit (or any person for whom any such beneficiary or any such transferee may be acting); or ()d any delay or loss in transit of any messages, letters or documents, any delay, interruption, mutilation or other error in the transmission of any telecommunications, or any error in the translation or interpretation of any technical terms or any messages or documents relating to the Letter of Credit; or ()e any allegation that any demand, statement or any other document presented under the Letter of Credit is forged, fraudulent, invalid or insufficient in any respect, or that any statement therein is untrue or inaccurate in any respect whatsoever or that variations in punctuation, capitalization, spelling or format were contained in the drafts or any statements presented in connection with any drawing; or ()f any exchange, release or non-perfection of any lien you hold in any collateral securing our obligations hereunder or the release of any guarantor of such obligations; or ()g any action or inaction for which you have no responsibility to us and which does not impair your rights and remedies against us under Section 15 below. Nothing contained herein shall constitute any waiver by us of any rights or remedies which we may have against you resulting from your gross negligence or willful misconduct; provided, that we expressly agree that our right to exercise any such rights is conditioned upon our having made all payments required to be made by us to you hereunder. .3 If at any time the United States currency equivalent of the obligations owed by us hereunder payable in a currency other than United States currency increases as a result of a change in the rate of exchange between United States currency and such other currency, we shall, on demand, grant you a security interest in, and deliver to you, such property acceptable to you as you may reasonably require as collateral for our obligations hereunder. .4 If, after the date hereof, the adoption of any applicable law, rule or regulation, or any change therein or in the interpretation or administration thereof by any governmental authority, central bank or comparable agency, or compliance by you with any request or directive (whether or not having the force of law) of any such authority (a "Change of Law") shall have the effect of increasing the cost to you of issuing or maintaining the Letter of Credit beyond any adjustment made by you in determining the pricing therefor (whether because of the imposition of, or a change in or in the amount of, any reserve, deposit, assessment or similar requirement against assets or liabilities of, or commitments or extensions of credit by you, or otherwise) or of reducing the rate of return on your capital as a consequence of your obligations under the Letter of Credit to a level below that which you could have achieved but for such Change of Law (taking into consideration your policies with respect to capital adequacy), then from time to time upon your demand, we shall pay to you such amounts as shall reimburse you for such increased costs or compensate you for such reduction. .5 We are solely responsible for preparing or approving the text of the Letter of Credit as issued by you and as received by the beneficiary. Your recommendation or drafting of text or your use or non-use or refusal to use text submitted by us shall not affect our ultimate responsibility for the final text and its receipt by the beneficiary. We acknowledge that we have not relied on you in any manner in connection with the wording of the Letter of Credit, including the draw conditions or the structuring of the underlying transaction. These are our responsibility, undertaken with the opportunity to consult with our counsel. Applicant’s Initials: ____________ page 3 of 7 XXXX Bank Application & Agreement for Standby Letter of Credit
  4. .6 Any changes or modification with respect to the terms or provisions of the Letter of Credit or any of the matters or things herein contained must be in writing and signed by us, shall be effective only after receipt thereof and agreement thereto by you and all other concerned parties and shall have no effect upon actions taken by you or by your correspondents prior to such receipt or upon the remaining terms or provisions of the Letter of Credit or this Agreement. Any such changes or modifications made by any of us shall be deemed to have been made by all of us. .7 Upon the occurrence of any of the following: (a) failure of any of us to perform or comply with the terms and provisions of this Agreement, including, without limitation, to make payments or furnish collateral as required hereunder; or (b) if any representation or warranty made by us hereunder or in connection with the issuance of the Letter of Credit shall be inaccurate or incomplete in any material respect when made; or (c) the failure in business, dissolution, termination of existence or insolvency of any of us; or (d) if any petition in bankruptcy is filed by or against any of us, or if any proceeding in bankruptcy or under any applicable law relating to the relief of debtors is commenced for the relief or readjustment of any indebtedness of any of us either through reorganization, composition, extension, arrangement, or otherwise, or if any of us should make an assignment for the benefit of creditors or seek to take advantage of any insolvency law; or (e) if a receiver of any of our property should be appointed at any time or if any of our funds or other property which may be in or come into your possession or control or that of any third party acting on your behalf is attached or distrained or becomes subject to any mandatory order of court or other legal process; then, automatically upon the occurrence of an event under subsection (d) above and, in all other cases, at your option, all unrepaid drawings under the Letter of Credit and interest accrued and unpaid thereon and the full amount of our contingent liability to reimburse you for future drawings under the Letter of Credit and all other of our obligations hereunder shall become immediately due and payable, without demand upon or presentment, which are hereby expressly waived by us, and you are hereby irrevocably authorized to exercise all rights, powers and remedies available to you, at law, in equity or otherwise, including, without limitation, as a secured party with respect to any collateral held for such obligations. Without limiting the generality of the foregoing, full power and authority are hereby given you to the fullest extent permissible by law to sell, assign, and deliver all or any property which has been delivered to you by us or on our behalf hereunder or any substitutes therefor and any additions or accessions thereto, or any other property upon which you have hereinbefore been given a lien or security interest, at any public or private sale, at your option, either for cash or on credit or for future delivery, without assumption of any credit risk, and without demand, advertisement or notice of any kind, all of which are hereby expressly waived. Any and all amounts received by you, from whatever source, in payment or as credit support for our obligations hereunder shall be applied as follows: (i) first, against all costs and expenses incurred by or assessed against you in exercising your rights and remedies hereunder, including, without limitation, all costs and expenses of retaking, holding, care, safekeeping, collection, preparation for sale, sale, delivery or otherwise, including, without limitation, reasonable attorneys' fees and legal expenses incurred by you in connection therewith at trial and on appeal, and (ii) then, to the payment or reduction of unrepaid drawings under the Letter of Credit and interest accrued and unpaid thereon and to all other outstanding obligations. Thereupon, the balance of amounts received shall be held by you as collateral security for our contingent obligations with respect to future drawings under the Letter of Credit and other obligations arising under this Agreement until all such drawings and such other obligations have been paid and performed in full and the Letter of Credit expired, cancelled or returned unutilized. We hereby irrevocably grant to you a first priority, perfected security interest in all amounts at any time received by you hereunder to hold with all rights of a secured party under the Uniform Commercial Code and authorize you to debit from time to time any and all such amounts in satisfaction of our now existing and future arising obligations hereunder, including, without limitation, to repay drawings under the Letter of Credit; provided, however, that nothing contained herein shall in any manner affect our liability to you with respect to such drawings or other obligations in the event you, for whatever reason, do not so debit such amounts. You are hereby authorized, at your option and without any obligation to do so, to transfer to and/or register in the name of your nominee all or any part of the property which may be held by you as security at any time hereunder, and to do so before or after the maturity of any of the said obligations, with or without notice. .8 The Letter of Credit shall be subject to and performance by you, your correspondents and the beneficiaries thereunder shall be governed by the International Standby Practices 98 (“ISP98”) and, to the extent not inconsistent with ISP98, the laws of the State of California, unless otherwise stipulated on Page 1 hereof or in the Letter of Credit. If so stipulated on Page 1 hereof or in the Letter of Credit, the Letter of Credit will be governed by the Uniform Customs and Practice for Documentary Credits (the "UCP") published by The International Chamber of Commerce in the form in effect at the date of issuance of the Letter of Credit, and, to the extent not inconsistent with the UCP, the laws of the State of California or such other jurisdiction as may be set forth on Page 1 hereof or in the Letter of Credit. .9 You may assign or transfer this Agreement, or any instrument and/or document evidencing all or any of the aforesaid obligations and/or liabilities, and may deliver all or any of the property then held as security therefor to the transferee, who shall thereupon become vested with all the powers and rights in respect thereto given you herein or in the instrument and/or document transferred, and you shall thereafter be forever relieved and fully discharged from any liability or responsibility with respect thereto, but you shall retain all rights and powers hereby given with respect to any and all instruments, documents, rights or property not so transferred. .10 This Agreement shall be binding upon us as well as upon our legal representatives, successors and/or assigns; provided, however, that this Agreement may not be assigned by us without your prior written consent and any assignment of this Agreement without such consent shall automatically be deemed null and void. .11 This Agreement shall be deemed to be made under and shall be governed by the internal laws of the State of California without giving effect to its choice of law rules. We irrevocably: (a) submit to the jurisdiction of any federal or state court in the State of California, (b) waive any right to object to such jurisdiction on grounds of inconvenient forum or improper venue, and (c) agree that service of process pursuant to court rule will grant personal jurisdiction over us. Applicant’s Initials: ____________ page 4 of 7 XXXX Bank Application & Agreement for Standby Letter of Credit
  5. .12 WAIVER OF JURY TRIAL. EACH OF US WAIVES OUR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. WE EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, WE EACH FURTHER AGREE THAT OUR RESPECTIVE RIGHTS TO A TRIAL BY JURY ARE WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event the foregoing waiver is held unenforceable, each of us agrees that all disputes arising out of or in connection with this Agreement or the transactions contemplated hereby shall be resolved by a judicial reference proceeding pursuant to California Code of Civil Procedure Section 638. The judicial referee appointed to decide the judicial reference proceeding shall be empowered to hear and resolve any or all issues in the proceeding, whether of fact or law. .13 Any action to enforce a right or obligation under or arising out of this Agreement must be commenced within one year of the expiration of the Letter of Credit or one year after the cause of action accrues, whichever is later. A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. .14 If the Letter of Credit is being issued pursuant to a loan or other credit agreement, the terms contained in such agreement shall control to the extent inconsistent with this Agreement. .15 You shall not be responsible to us for, and your rights and remedies against us shall not be impaired by: (a) action or inaction required or permitted under (i) the Uniform Commercial Code, the UCP, ISP98, or the United Nations Convention on Independent Guarantees and Stand-by Letters of Credit, as chosen in or as in effect where and when the Letter of Credit is issued, (ii) the law or published practice rules to which the Letter of Credit is subject, (iii) an applicable standard practice of banks that regularly issue letters of credit, (iv) an applicable order, ruling, or regulation of any court, arbitrator, or government agency, (v) a published statement or interpretation on a matter of applicable standard bank practice, or (vi) an opinion received from your legal counsel on a matter of law or from an expert engaged by you on a matter of practice; or (b) honor of any presentation that substantially or reasonably complies with the terms and conditions of the Letter of Credit, even if the Letter of Credit requires strict or literal compliance by the beneficiary; or (c) honor of a nonnegotiable or informal or unmarked demand or of a demand by the beneficiary presented electronically, even if the Letter of Credit requires that the beneficiary's demand be in the form of a draft and state that it is drawn under the Letter of Credit; or (d) honor of a presentation without regard to any non-documentary condition(s) in the Letter of Credit, even if UCP 500 Article 13(c) or ISP 98 Rule 4.11 "Non-Documentary Terms or Conditions" (or any successor provision) does not apply to the Letter of Credit; or (e) honor of a presentation up to the amount available under the Letter of Credit against a draft or other documents claiming amount(s) in excess of the amount available; or (f) honor of a presentation after the expiration date of the Letter of Credit if presentation prior to such expiration date was prevented by an interruption of business, including riots, civil commotions, insurrections, wars or any other causes beyond your control or strikes or lockouts; or (g) honor of a presentation after the expiration date of the Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by you if subsequently you or any court or other finder of fact determines such presentation should have been honored; or (h) dishonor of any presentation that does not strictly comply or that is fraudulent, forged, or otherwise not entitled to honor. 16. We hereby agree to indemnify you, your affiliates, officers, directors, employees and agents (each, an “Indemnified Party”), harmless from and against all losses, damage, costs or expenses (including, without limitation attorneys’ fees) arising out of: (a) the issuance by you of the Letter of Credit or incident to your collection of amounts owed by us hereunder or the enforcement of your rights hereunder, including any loss, damage, cost or expense arising in whole or in part from the negligence of the Indemnified Party seeking indemnification but excluding any loss or damage resulting from the gross negligence or willful misconduct of such Indemnified Party, and (b) our failure to timely procure licenses or comply with applicable laws, regulations or rules or any other conduct or failure by us relating to or affecting the Letter of Credit or this Agreement. Our obligations hereunder shall survive the expiration, cancellation or termination of the Letter of Credit and the payment of all other obligations hereunder. 17. We agree to notify you of any objection we may have to your issuance or amendment of the Letter of Credit, your acceptance or rejection of a presentation under the Letter of Credit, or any other action or inaction taken or proposed to be taken by you under or in connection with this Agreement or the Letter of Credit. Our notice of objection must be given to you by expeditious means within 3 banking days after we receive notice of the action or inaction taken or proposed to be taken by you. 18. We represent, warrant, and covenant on a continuing basis that: ()a we (if not an individual) are and shall remain duly organized, validly existing, and in good standing with the power and authority under applicable law and its charter to carry on its business as now being conducted; ()b this Agreement is and shall remain duly authorized, executed, and delivered by us and our legal, valid, and binding obligation, enforceable in accordance with its terms; (c) signing, delivering, and performing this Agreement, the Letter of Credit, and the underlying agreement and underlying transaction by us and you do not and shall not conflict with: (i) any charter provision, by-law, or resolution or with any indenture, instrument, agreement, or undertaking of or applicable to us, or (ii) any law, regulation, order, or governmental consent requirement (including, without limitation, any that regulate exports or imports, foreign assets, foreign exchange, investments, margin stock, investment companies, securities offerings, infringement, boycotts, or money laundering) applicable to us or you; Applicant’s Initials: ____________ page 5 of 7 XXXX Bank Application & Agreement for Standby Letter of Credit
  6. (d) we have given and shall timely give you financial statements as requested and shall promptly provide such additional financial and other information (e.g., regarding the status of the underlying transaction) as is available to us and as you may from time to time reasonably request; e) our name, type and place of organization (if not an individual), and address as shown in this Agreement are, and shall remain until reasonable notice of any change is given to you, our exact full legal name, the correct type and place of organization, and the correct address of our residence (if an individual), chief executive office, and principal place of business; and (f) no information now or hereafter furnished by us to you in connection with this Agreement is or shall be materially false or misleading when furnished. 19. All notices required to be given by us or you to the other shall be addressed: (a) if by you to us, to us at the address shown on Page 1 hereof, and (b) if by us to you, to you at XXXX Bank, Global Trade Services, 1977 Saturn St., Monterey Park, CA 91755 or XXXX Bank, Global Trade Services, 180 Montgomery St., 4th Fl., San Francisco, CA 94104 or such other address(es) as either we or you may advise in writing. 20. Electronic transmission, including, without limitation, SWIFT, or other notice from your correspondents of payment, acceptance, or other action under the Letter of Credit shall be presumptive evidence of our liability to reimburse you. 21. We agree not to initiate or acquiesce in any judicial, administrative, or other proceeding for any injunctive or declaratory relief to block you from paying the Letter of Credit. This clause shall apply notwithstanding any fraud covered by Section 5-114 of the Uniform Commercial Code. We acknowledge that remedies for all such fraud-related risks have been adequately considered in the agreements between the beneficiary (ies) of the Letter of Credit and ourselves. 22. No delay on your part in the exercise of any of your rights or remedies shall operate as a waiver, nor shall any single or partial waiver of any right or remedy preclude any other further exercise of that right or remedy, or the exercise of any other right or remedy, and no waiver or indulgence by you of any default shall be effective unless it is in writing and signed by you, nor shall a waiver on any one occasion be construed as a bar to, or waiver of, any right on any future occasion. 23. Any provision that may prove unenforceable under any law shall not affect the validity of any other provision. This Agreement shall inure to the benefit of, and be enforceable by you and your successors and assigns. 24. The terms “we”, “our”, and “us” used here shall be deemed to refer to each of the persons signing this agreement, jointly and severally, it being expressly acknowledge that all obligations and liabilities of such persons hereunder are joint and several. If this Agreement is signed by one individual, such terms shall be read throughout as "I"; "my" and "me", as the case may be. I/WE UNDERSTAND THAT THE FINAL FORM OF THE LETTER OF CREDIT MAY BE SUBJECT TO SUCH REVISIONS AND CHANGES AS ARE DEEMED NECESSARY OR APPROPRIATE BY XXXX BANK AND I/WE HEREBY CONSENT TO SUCH REVISIONS AND CHANGES. THE OPENING OF THIS CREDIT IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS APPLICATION AND AGREEMENT, TO WHICH I/WE AGREE AND ACCEPT. THE SIGNER(S) CERTIFY THAT HE/SHE/THEY IS/ARE AUTHORIZED TO EXECUTE THIS APPLICATION AND AGREEMENT FOR STANDBY LETTER OF CREDIT ON BEHALF OF THE APPLICANT NAMED ON PAGE 1 HEREOF. YOU ARE AUTHORIZED TO DEBIT OUR ACCOUNT NO. ________________________ (CHECKING/SAVINGS/MONEY MARKET) FOR FEES AND CHARGES. _______________________________________ ___________________________________ ____________________ Applicant’s Name Authorized Signature & Title Date _______________________________________ ___________________________________ ____________________ Applicant’s Name Authorized Signature & Title Date FOR BANK USE ONLY This is a BusinessLink Express Letter of Credit Application. (Check if applicable and complete the BusinessLink Security Agreement and Pledge for Use with Letter of Credit, form number 110-02940 (05/06). ISSUANCE COMMISSION __________________________________ (IF NOT STATED, STANDARD COMMISSION WILL APPLY), PLUS ANY OTHER APPLICABLE FEES AND CHARGES PURSUANT TO XXXX BANK’S MOST RECENT SCHEDULE OF FEES AND CHARGES FOR INTERNATIONAL TRANSACTIONS. AMENDMENTS TO INCREASE OR EXTEND WILL BE AT THE SAME RATE AS THE ISSUANCE FEE UNLESS INSTRUCTED OTHERWISE. NARRATIVE AMENDMENTS WILL BE CHARGED PER THE SCHEDULE OF FEES AND CHARGES. BRANCH NAME: ________________________ OFFICE NO. ______ OFFICER NAME: ____________________________________ PHONE NUMBER: _________________________________ OFFICER SIGNATURE: ____________________________________ Applicant’s Initials: ____________ page 6 of 7 XXXX Bank Application & Agreement for Standby Letter of Credit
  7. ALL PRECEDING PAGES MUST BE INITIALED BY THE APPLICANT Applicant’s Initials: ____________ page 7 of 7 XXXX Bank Application & Agreement for Standby Letter of Credit

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